Gov’t readies new incentive package for listing on the EGX

Gov’t prepares new incentive package for listing on the EGX: The Madbouly government is working on a package of incentives for listing on the stock exchange in an effort to stimulate government offerings and encourage private listings on the EGX, a senior government official told EnterpriseAM.

Reduced taxation on first-time listings is among the incentives: A committee made up of representatives from the Finance Ministry, the EGX, and the Financial Regulatory Authority (FRA) is exploring the possibility of tax exemptions on gains from new listings, the source said. The government had previously approved a 50% tax reduction in 2023, but the failure to implement the long-delayed capital gains tax prevented investors from benefiting from this incentive.

This could lead to more listings on the bourse: Tax exemptions on earnings from new public offerings would attract more private listings and ensure strong subscription volumes for both government and private offerings, the source said.

The implementation of stamp tax is drawing nearer: The move to reinstate a 0.15%stamp tax on all EGX transactions as a simpler alternative to the capital gains tax is currently in its final stages before cabinet approval, after which it will be referred to the House. The tax would apply to both resident and non-resident investors, the source added.

REMEMBER- A government source last month told EnterpriseAM that the long-awaited and repeatedly delayed capital gains tax on EGX transactions may never come, with the cabinet having held discussions over the last few months over alternatives to the capital gains tax — particularly a stamp tax on EGX transactions.